UK Regulators Halve Bonus Deferral Period for Senior Bankers
The Prudential Regulation Authority and Financial Conduct Authority have finalized reforms to senior banker compensation, slashing mandatory bonus deferral periods from eight to four years. The changes align UK rules with global standards while maintaining safeguards against excessive risk-taking.
Partial bonus payouts will now be permitted from year one for top executives, accelerated from the previous three-year threshold. Regulators estimate the streamlined rules will reduce FCA remuneration guidelines by over 70%, eliminating redundant requirements.
"These reforms strike the right balance between competitiveness and responsibility," said PRA CEO Sam Woods, emphasizing the measures won't revive pre-2008 crisis pay structures. The updated framework takes effect October 2025, applying to that year's compensation cycles.
